A Few Points on the German Inventor Remuneration Process

According to WIPO's English-language translation of the German "Law on Employee Inventions:"

2.– Inventions within the meaning of this Law are only those which may be the
subject of a patent or of protection as a utility model. Inventions within the meaning of this Law are only those which may be the subject of a patent or of protection as a utility model.

4.– (1) Employee inventions within the meaning of this Law may be either tied or
free.
(2) Tied inventions (service inventions) are those made during the term of employment which:
(i) either resulted from the employee’s tasks in the private enterprise or in the public authority,
(ii) or are essentially based upon the experience or activities of the enterprise or public authority.

6.– (1) An employer may claim a service invention by means of an unlimited or a limited claim.
(2) Such claim shall be made in a written statement, addressed to the employee. It shall be made as soon as possible, and no later than four months from the receipt of a proper report (Section 5(2) and (3)).

7.– (1) On the receipt of a written declaration of an unlimited claim, all rights in the service invention shall pass to the employer.
(2) On the receipt of a written declaration of a limited claim, a non–exclusive right to use the service invention shall pass to the employer. Should an employer’s right of use unreasonably impede an employee’s further exploitation of his invention, the employee may request that, within a period of two months, his employer either
make an unlimited claim to the service invention or release it to the employee.
(3) Dispositions of a service invention made by an employee before his employer has declared a claim, shall have no effect on his employer, insofar as the employer’s rights are concerned.

8.– (1) A service invention shall become free:
(i) where the employer releases it by a written statement;
(ii) where the employer makes a limited claim to it, subject to the employer’s right to use the invention in accordance with Section 7(2);
(iii) where the employer has not made a claim to it within four months upon receiving a proper invention report (Section 5(2) and (3)) or, for cases falling under Section 7(2), within two months of the request filed by his employee.
(2) The employee may dispose of a service invention that has become free and the restrictions in Sections 18 and 19 shall not apply.

9.– (1) The employee shall have a right to reasonable compensation as against his employer, as soon as the employer has made an unlimited claim to a service
invention.
(2) In assessing compensation, due consideration shall in particular be given to the commercial applicability of the service invention, the duties and position of the employee in the enterprise, and the enterprise’s contribution to the invention.

10.– (1) The employee shall have a right to reasonable compensation as against his
employer, as soon as the employer has made a limited claim to a service invention and has used it. Section 9(2) shall apply mutatis mutandis.
(2) After having stated a claim to a service invention, an employer may not, in dealing with his employee, contest the invention’s eligibility, at the time of the claim, for industrial property protection unless a decision to this effect has been rendered by the Patent Office or a court of law. The employee’s right to such compensation as becomes payable before the decision has force of law shall not be affected thereby.

18.– (1) An employee who has made a free invention during the term of an employment contract shall notify his employer in writing thereof without delay. He shall give the employer all the details–concerning the invention and, if necessary, concerning its realization–which the employer may need in order to judge whether it is in fact a free invention.
(2) Where the employer does not contest that the invention notified to him is a free invention, by written declaration to the employee within three months of the notification, he may no longer claim the invention as a service invention.
(3) There shall be no obligation to notify the employer of a free invention if the invention is obviously not capable of being used in the employer’s enterprise.

19.– (1) Before exploiting a free invention further during the term of his employment contract, an employee must offer his employer at least a non–exclusive right to use the invention on reasonable terms, if the invention falls within the range of the actual or planned activities of the employer’s enterprise at the time the offer is made. Such offer may be submitted together with the notification required by Section 18.
(2) Where the employer does not accept the offer within three months, his prerogative shall lapse.
(3) Where the employer states within the time provided by subsection (2) that he intends to acquire the rights offered to him, but claims that the terms offered to him are not reasonable, the court shall determine the terms upon a declamatory action by the employer or employee.
(4) The employer or the employee may request a new determination of the terms, if the circumstances essential to the terms agreed or fixed have changed substantially.